You are on page 1of 38

Government of Pakistan People’s Republic of China

Ministry of Planning, National Development

CPEC
Development and Reform & Reform Commission

CHINA-PAKISTAN ECONOMIC CORRIDOR

Long Term Plan


for
China-Pakistan Economic Corridor
(2017-2030)

Signing of MOU on CPEC - July 05, 2013, Beijing

Prime Minister Shahid Khaqan Abbasi shaking hand


with Chinese Premier Li Keqiang

6th JCC Meeting at Beijing, China on 29 December 2016

7th JCC Meeting at Islamabad on 21 November 2017

w w w. c p e c . g o v. p k
Prime Minister of Pakistan President of China
Mr. Shahid Khaqan Abbasi Mr. XI Jinping

” Pak-China bilateral ties are time


tested; our relationship has
attained new heights after the
”To build a China-Pakistan
community of shared destiny is a
strategic decision made by our two
China-Pakistan Economic Corridor governments and peoples. Let us
that is a game changer for the work together to create and even
region and beyond. brighter future for China and
” Pakistan.

i
w w w. c p e c . g o v. p k
ii
Long Term Plan for China-Pakistan Economic Corridor

Table of contents
Introduction 1-2

Chapter I The Denition of the Corridor and Building Conditions 3-7

Chapter II Visions and Goals 8-9

Chapter III Guidelines and Basic Principles 10 - 12

Chapter IV Key Cooperation Areas 13 - 22

Chapter V Investment and Financing Mechanism and Supporting Measures 23 - 26

iii
w w w. c p e c . g o v. p k
INTRODUCTION
Long Term Plan for China-Pakistan Economic Corridor

INTRODUCTION

Since the formal establishment of diplomatic relations, the People’s Republic of


China and the Islamic Republic of Pakistan have seen their relations ever consolidating and
progressing. Throughout different historical periods and despite changes with the times,
Chinese and Pakistani governments and people have been working hard to enrich the
friendship, and have set a model for friendly bilateral ties between different cultures,
social systems and ideologies. Chinese and Pakistani governments and people have deeply
realized the importance of developing the China-Pakistan Economic Corridor, starting
from Kashgar in Xinjiang, China, and reaching Karachi and Gwadar, southern coastal cities
in Pakistan via the Khunjerab Pass and several other nodal areas, for cementing China-
Pakistan economic relations, promoting friendly cooperation and establishing the shared
destiny of the two countries. CPEC is an economic and development project for the benet
of the people of the region.

During President Xi Jinping’s visit to Pakistan in April 2015, the all-weather strategic
cooperation partnership between the two countries was enriched with new connotations.
The two sides has set up the“1+4” cooperation mode, namely, the two sides take CPEC as
the core while prioritizing in Gwadar, Energy, Transport Infrastructure and Industrial
Cooperation, which has opened a new chapter for the CPEC construction.

In line with the consensus reached between Premier Li Keqiang and then Pakistan
Prime Minister Nawaz Sharif, relevant ministries and departments of both countries have
set up a cooperation mechanism to coordinate the development of CPEC and jointly
formulated the Long Term Plan for China-Pakistan Economic Corridor (2017-2030).

This plan is a national plan approved by both Chinese and Pakistani governments. It
will effectively match relevant national plans and local plans of China as well as Pakistan’s
Vision 2025.This plan is effective until 2030, the short-term projects included will be
considered up to 2020; medium-term projects up to 2025; and long-term projects up to
2030.

2
w w w. c p e c . g o v. p k
Chapter I
The Definition of the
CPEC and Building Conditions
Long Term Plan for China-Pakistan Economic Corridor

THE DEFINITION OF THE CPEC AND BUILDING CONDITIONS

I. The Definition of the CPEC

- Definition. The CPEC is a growth axis and a development belt featuring


complementary advantages, collaboration, mutual benets and common prosperity. With
the comprehensive transportation corridor and industrial cooperation between China and
Pakistan as the main axis, and with concrete economic and trade cooperation, and people-
to-people exchange and cultural communications as the engine, CPEC is based on major
collaborative projects for infrastructure construction, industrial development and
livelihood improvement, aimed at socio economic development, prosperity and security in
regions along it.

- CPEC coverage. The CPEC covers China's Xinjiang Uygur Autonomous Region and
the whole territory of Pakistan. In order to reect the level, scope and layout of the
construction and development of the Corridor, its coverage is divided into the core zone
and the radiation zone.

- Key nodes. The node cities that the corridor passes through include Kashgar,
Atushi, Tumshuq, Shule, Shufu, Akto, Tashkurgan Tajik, Gilgit, Peshawar, Dera Ismail Khan,
Islamabad, Lahore, Multan, Quetta, Sukkur, Hyderabad, Karachi and Gwadar.

- Spatial layout. The CPEC's core zone and the radiation zone, presents the spatial
layout of “one belt, three axes and several passages”. By “one belt” we mean the belt area
composed of the core zone of the CPEC, including Kashgar, Tumshuq city, and Atushi city
and Akto county in Kizilsu Kirghiz autonomous prefecture of Xinjiang, China, as well as
Islamabad, parts of Punjab, Sindh, Khyber-Pakhtunkhwa, Balochistan, AJK and Gilgit-
Baltistan. The “three axes” refer to three horizontal axes connecting Lahore and
Peshawar, Sukkur and Quetta, and Karachi and Gwadar. The “several passages” refer to
several railways and highway trunk lines from Islamabad to Karachi and Gwadar.

- Key functional zones. The CPEC is divided into the following ve functional zones
from north to south: Xinjiang foreign economic zone, northern border trade logistics and
business corridor & ecological reserve, eastern and central plain economic zone, western
logistics corridor business zone, and southern coastal logistics business zone. Most of the
node cities, transportation corridors and industrial clusters are concentrated in them.

4
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

THE DEFINITION OF THE CPEC AND BUILDING CONDITIONS

II. Basic Conditions

- China-Pakistan cooperation on economic and social development has made


remarkable progress. In the past ve years, China-Pakistan trade has continued to grow
rapidly, with the annual growth rate of 18.8% on average; bilateral investment has also
been soaring, and China has become the biggest sources of foreign capital for Pakistan.
International economic and technological cooperation has shown strong momentum,
expanding into more areas and reaching a higher level; social and people-to-people
exchange has been increasing, bilateral ties keep improving. By leveraging their
respective comparative advantage and strengthening all-round cooperation based on the
physical Corridor, China and Pakistan are expected to bring their economic cooperation to
an unprecedented height.

- There is a huge potential for China and Pakistan to strengthen cooperation


based on complementary resources. China and Pakistan are blessed with different
natural endowments, and at different stages of economic development, industrialization
and urbanization. China has advantages in infrastructure construction, high-quality
production capacity in equipment manufacturing, iron & steel and cement industries as
well as nancing for investment. While Pakistan owns rich human and natural resources,
huge potential for economic growth and broad market prospects besides a geo-strategic
location. The orderly and timely ow of economic factors in both countries along the CPEC
will signicantly improve the resource allocation efciency and bring into full play the
comparative advantage of each country.

- West China has entered into a new historic phase of economic and social
development. Since the implementation of the western development strategy, West
China, in particular Xinjiang, has made huge economic and social progress. The economic
strength has signicantly increased with improved infrastructure resulting in betterment
of people's livelihood. Kashgar, a major city for Xinjiang to open up to the outside world,
has embarked on the fast lane of economic and social development, and become more and
more open. The infrastructure has been improving along the way from Kashgar to
Khunjerab Pass, providing basic support for China-Pakistan economic and trade exchange
on land.

- Pakistan has the potential to grow into a “tiger of Asia”. Pakistan blessed with
abundant natural resources and a vast domestic market. Extensive consensus on the Vision

5
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

THE DEFINITION OF THE CPEC AND BUILDING CONDITIONS

2025 has been reached, which seeks to harness location advantage of Pakistan at
intersection of South Asia, China and Central Asia for greater geo-economic cooperation
and development by stronger regional connectivity. It's being realized by improving public
governance, reinforcing infrastructure construction and harnessing the demographic
dividend to accumulate human and social capital, elevate the industrialization level and
develop competitive knowledge-based economy. The CPEC will greatly speed up the
industrialization and urbanization process in Pakistan and help it grow into a highly
inclusive, globally competitive and prosperous country capable of providing high-quality
life to its citizen.

III. Opportunities

- The world economy is recovering and the external environment is favorable.


After years of recession and adjustment following the last international nancial crisis,
the world economy is expected to enter a new round of growth. The investment and
nancing environment for major collaborative projects between China and Pakistan is less
rigid; the market environment for their industrial cooperation is improved; and it looks
more promising for the international community to participate in the CPEC building and for
neighboring countries to share its fruits.

- The CPEC is closely associated with the implementation of the Belt and Road
Initiative. As a pilot project of the Belt and Road Initiative, the experience accumulated
from the CPEC will be promoted to other countries along the Belt and Road. The fusion of
national development strategies will facilitate policy coordination between China and
Pakistan; their geographical proximity is good for infrastructure connectivity; their closely
coordinated economic and trade strategies will help realize unimpeded trade; the two
countries are highly complementary to each other in investment and nancing, making
nancial integration much easier; their all-weather strategic friendship is deeply rooted
among people, thus helpful for people-to-people bond.

- The macro economy in Pakistan has been much improved. Pakistan has reached
wide consensus on social stability, economic development and livelihood improvement, a
series of economic reform has started to take effect, and its advantage in the young
workforce and demographic dividend are playing a bigger role. The macro economy has
turned for better in Pakistan in recent years. The economic growth has been picking up,
boosting the market demand for transportation and energy; the ination level has been

6
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

THE DEFINITION OF THE CPEC AND BUILDING CONDITIONS

low, driving up the expected actual returns of major projects for the CPEC building; the
international balance of payments has been moving towards equilibrium, foreign
exchange reserves have been growing and the expectation of the exchange rate has been
stable, reducing the investment and nancing risks for major CPEC projects. The
macroeconomic environment has never been so better before for the building of the CPEC.

IV. Possible Challenges

- Geopolitical and security risks. The geopolitical environment is inherently


unstable in South Asia. World powers' adjustment of their policy towards this region might
add to the uncertainty. The mix of international, regional, national and extremist factors
might cause disruptive activities, threatening the security of the CPEC building.

-The restraints of natural and geographical factors. Southern Xinjiang of China


suffers from a weak industrial base and limited economic scale. Because of the special
natural and geographical conditions in China-Pakistan border area, the construction,
operation and management of major infrastructure projects is costly. The Indus River
valley in Pakistan is comparatively economically advanced, but with high population
density and limited resource carrying capacity, while the western area is poorly developed
and troubled with harsh natural conditions.

- Restraints to economic growth prospects. Pakistan needs to address major


bottlenecks to economic and social development to sustain economic growth momentum.
The energy, infrastructure, administration and governance deciencies, besides
unbalanced regional economic and social development, and external sector
vulnerabilities need to be monitored to avoid any possible challenges to CPEC.

7
w w w. c p e c . g o v. p k
Chapter II
Visions and Goals
Long Term Plan for China-Pakistan Economic Corridor

VISIONS AND GOALS

I. Visions

- The Chinese side vision: to further advance the western development strategy,
promote economic and social development in Western China, accelerate the Belt and Road
construction, give play to China's advantages in capital, technology, production capacity
and engineering operation, and promote the formation of a new open economic system.

- The Pakistani side vision: to fully harness the demographic and natural
endowment of the country by enhancing its industrial capacity through creation of new
industrial clusters, while balancing the regional socioeconomic development, enhancing
people's wellbeing, and promoting domestic peace and stability.

- The international and regional vision: to form a new international logistics


network and industrial layout based on major transportation infrastructure; elevate the
status of South Asian and Central Asian countries in labor division of global economy;
promote regional economic integration through stable trade growth, international
economic and technological cooperation and personnel exchange.

II. Goals

By 2020, the CPEC strive to take the initial shape, major bottlenecks to Pakistan’s
economic and social development shall be basically addressed, and the CPEC shall start to
boost the economic growth along it for both countries.

By 2025, the CPEC building strive to be basically done, the industrial system
approximately complete, major economic functions brought into play in a holistic way, the
people’s livelihood along the CPEC signicantly improved, regional economic
development more balanced, and all the goals of Vision 2025 achieved.

By 2030, the CPEC building strive to be entirely accomplished, the endogenous


mechanism for sustainable economic growth in place, the CPEC’s role in stimulating
economic growth in Central Asia and South Asia brought into holistic play, and South Asia
shall grow into an international economic zone with global inuence.
I. Guidelines

9
w w w. c p e c . g o v. p k
Chapter III
Guidelines and Basic
Principles
Long Term Plan for China-Pakistan Economic Corridor

GUIDELINES AND BASIC PRINCIPLES

I. Guidelines

We shall proceed with all-weather strategic partnership of cooperation, concepts of


harmony, inclusiveness, mutual benets and sustainability. Besides seizing opportunities
presented by China's economic development, transformation and upgrade, and joint
construction of the Belt and Road Initiative, we shall capitalize on the favorable
environment created by the extensive consensus on the Vision 2025, growing economic
and social stability and a new round of robust growth in Pakistan. It will fully leverage
China's industrial, capital, and institutional advantages in the light of Pakistan's market,
demographic dividend and geographical imperatives. Through mutual consultations, China
and Pakistan shall share responsibilities and fruits, form a “1+4” collaboration pattern
(featuring the CPEC as the center and four priorities, namely the Gwadar port, Energy,
Transport Infrastructure and Industrial Cooperation). We shall bring China and Pakistan
closer to each other with the physical economic bond of the CPEC and form a community of
indivisible common destiny.

II. Principles

- Government guidance and market-oriented operation. The Chinese and


Pakistani governments are the advocator, planner and guider of the CPEC project.
Considering the Chinese and Pakistani economic systems, commercial projects related to
the CPEC should be operated in a market-oriented way; quasi-commercial major
infrastructure projects could adopt the public private partnership mode; and non-
commercial projects concerning people's livelihood should involve multiple participants
and be implemented through fair competition.

-Spirit of partnership towards prosperity. China is responsible for planning,


nancing, building and operating projects within its territory, and for those in Pakistan,
China and Pakistan shall jointly prepare plans, divide nancing responsibilities based on
the project situation and their respective investment and nancing strength, give play to
their respective comparative advantage in project construction and implementation, and
share fruits based on the match of their cost, risk and returns

- Openness and inclusiveness. The planning and building of the CPEC will learn from
the latest theories about and achievements of other international corridors. China and
Pakistan welcome the international community to provide intellectual support to the CPEC

11
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

GUIDELINES AND BASIC PRINCIPLES

by various means, international organizations, other countries and the international


capital to jointly work on the CPEC building.

- Livelihood improvement and sustainable development. The improvement of


people's livelihood is on the top of the agenda of the CPEC project whose spatial layout
fully reects the regional development gap. Infrastructure connectivity construction shall
focus on improving basic public services for local residents, all-round industrial
cooperation show preference for local residents in employment, and the exchange and
cooperation in areas concerning people's livelihood lean towards the ordinary people. The
appeals and the population and resources carrying capacity of different areas along the
CPEC shall be coordinated and possible effect of climate change and other factors be
forward considered, to realize sustainable development.

- Orderly development with priorities highlighted. The relations between short-


term, medium-term and long-term projects shall be properly handled, the construction
timetable be laid down in an orderly way based on the readiness of each project, and
major projects of holistic signicance be carried out to address key issues of and possible
major bottlenecks to Pakistan's economic and social development in different phases.

- The Long Term Plan is a live document and it is recommended to be reviewed every
two years by both sides.

12
w w w. c p e c . g o v. p k
Chapter IV
Key Cooperation Areas
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

I. Connectivity

i. Construction of an integrated transport system

Transport infrastructure is the basic and prerequisite condition for the construction
of the CPEC. It is an important eld that can be relied on to guide and drive the economic
and social development of regions along the CPEC, besides promoting the
interconnectivity and all-round cooperation between China and Pakistan for shared
prosperity.

Through the joint planning and development of highways, railways, ports, aviation
and other infrastructure, a convenient, efcient and integrated transport corridor that
includes a variety of modes of transport can be formed, mainly drawing from Monographic
Study on Transport Planning, to achieve the transition from lagging behind to adaptation
and then to moderate advancement in the transport infrastructure of the main nodes along
the CPEC. In order to meet the needs of trade and personnel exchanges between China and
Pakistan for the socio-economic development of regions along the CPEC, following
initiatives have been planned to achieve the aforementioned objectives.

- Construction and development of Kashgar-Islamabad, Peshawar-Islamabad-


Karachi, Sukkur-Gwadar Port and Dera Ismail Khan-Quetta-Sohrab-Gwadar road
infrastructure, to enhance road safety and service levels and expand trafc capacity.

- Capacity expansion of existing railway lines (specically ML-1 that is of strategic


nature under CPEC), and construction of new projects,and promoting the modernization
of the railway and build an integrated transport corridor.

- Construction and development of Gwadar city and port; build a consolidation and
distribution transport system, continuously improve the infrastructure of the port,
accelerate the construction of East Bay Expressway and the new international airport and
enhance the competitiveness of the Free Zone to promote the social progress and
economic development of the region.

- Cooperation for implementing Gwadar city Master Plan.

- Strengthen China-Pakistan cooperation in technical training and cooperation in the


construction and management of transport infrastructure, to continuously provide talents

14
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

for the development of the CPEC and promote the sustainable development of
transportation industry.

ii. Information network infrastructure

China and Pakistan should boost information connectivity and promote pragmatic
cooperation through construction and operation of local communication networks and
broadcast & TV networks; besides strengthening information and communication
industries in both countries and synchronous construction of information, road and railway
infrastructure.

- Promote the construction of cross-border optical ber cables between China and
Pakistan and the construction of the backbone optical ber networks in Pakistan.

- Upgrading of Pakistan's network facilities, including the national data center and
the second submarine cable landing station.

- Expedite Pakistan to adopt China's Digital Terrestrial Multimedia Broadcasting


(DTMB) standard.

- Promote the ICT-enabled development of Pakistan, including e-government,


border electronic monitoring and safe city construction; promote the development of e-
commerce in Pakistan.

- Enhance the development of the information industry in Pakistan; build IT


industrial parks and IT industry clusters in Pakistan to improve Pakistan's information
technology and service outsourcing.

- Increase Pakistani personnel in exchange programs in China, establish technical


training centers in Pakistan, and strengthen the construction of ICT human resources in
Pakistan.

II. Energy Related Fields

China and Pakistan should strengthen cooperation in the elds of oil and gas,
electricity and power grids, and focus on promoting the construction of major projects of
thermal power, hydropower, coal gasication and renewable power generation, and

15
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

supporting power transmission networks, in order to enhance its power transmission and
supply reliability.

- Promote the cooperation in the development of oil and gas resources, research on
the integrated vision and demand of China and Pakistan oil and gas cooperation so as to
improve the cooperation between the two countries and diversify oil supplies. The
opinions of establishing oil reneries and storages along the CPEC route will also be
considered.

- Optimize the sourcing and use of coal, and research on development and utilization
of Pakistan's own coal for power plant and developing technologies for surface coal
gasication, expansion and augmentation of coal mining sector.

- Actively promote river planning and preparatory work of major projects to


accelerate the hydropower development process.

- Develop wind and solar energy based on local conditions, and establish diversied
energy supply channels.

- Strengthen the construction of high voltage-class power grids and power


transmission and distribution networks to fulll the electricity demand and ensure the
reliability of electricity supply in Pakistan.

To develop the industry for manufacturing of energy sector equipments required for
generation, transmission and distribution including renewable energy technologies.

III. Trade and Industrial Parks

China and Pakistan should strengthen cooperation in trade and industrial areas,
expand bilateral economic and trade relations, and enhance the level of bilateral trade
liberalization. They should cooperate in key areas, enhance the effectiveness of
cooperation and strive to achieve the synchronization, coordination and reciprocity of
economic development.

- Promote the quality, value addition, competitiveness and efciency improvement


of the textile and garment industry, expand the size of the textile industry, and increase
the supply of high value-added products; to adopt the means like export processing to

16
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

establish a regional cooperation and development model based on complementary


advantages, and mutual benets.

- Promote Special Economic Zones (SEZs) in all provinces and regions in Pakistan
along with Kashgar Economic and Technological Development Zone and Caohu Industrial
Park from Chinese side.

- Expand the cooperation in industry, promote Pakistan's industries from assembling


imported parts and components to localized production of parts, and encourage various
forms of Chinese enterprises to enter the Pakistan market to improve the development of
energy efcient industry in Pakistan.

- Promote the industrial capacity cooperation in sectors such as: chemical &
pharmaceutical, engineering goods, agro, iron & steel, light manufacturing & home
appliances and construction materials, and use efcient, energy-saving and
environmental friendly processes and equipment to meet the demands of Pakistan's local
markets and at the same time to further expand it to the international market.

- Increase the exploration and development of resources, and introduce bilateral


enterprises to participate in the exploration and development of mineral resources and
setting up of mineral processing zones and industries.

- Rely on industrial parks and the characteristics of bilateral economic and trade
cooperation to expand cooperation in related industries and promote the development of
industrial concentration.

- Expand trade logistics and areas of business cooperation, improve business-to-


business (B2B) links and the investment environment, optimize the bilateral trade
structure, and promote balanced trade development.

- Rely on the advantages of the ports to expand logistics transportation.

- Support the establishment of customs special supervision areas along the CPEC on
the basis of China- Pakistan economic cooperation zones and industrial parks in order to
provide investment platforms for companies and continue to extend transnational
industrial chains. Promote the development of Gwadar Free Zone, achieve information
docking of those free zones in Pakistan and the customs special supervision areas in China,

17
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

conduct standardized data exchange on pilot basis so as to realize free ow of goods among
customs special supervision areas along the CPEC route and enhance trade facilitation.

IV. Agricultural Development and Poverty Alleviation

China and Pakistan should give full play to their own comparative advantages to
strengthen agricultural infrastructure construction within the CPEC coverage and play
their own roles in agricultural personnel training, technical exchanges and cooperation.
They should cooperate in key construction areas such as biological breeding, production,
processing, storage and transportation, infrastructure construction, disease prevention
and control, water resources utilization, conservation and production, land development
and remediation, ICT-enabled agriculture and marketing of agricultural products to
promote the systematic, large-scale, standardized and intensied construction of the
agricultural industry. They should promote the transition from traditional agriculture to
modern agriculture in the regions along the CPEC to effectively boost the development of
local agricultural economy and help local people get rid of poverty and become better off.

- Strengthen the upgrading of agricultural infrastructure in the regions along the


CPEC.

- Promote the construction of water-saving modern agricultural zones, and increase


the development and remediation of medium- and low-yielding land to achieve efcient
use of resources.

- Strengthen drip irrigation technology for water efciency.

- Strengthen cooperation in the elds such as crop farming, live stock breeding,
forestry and food growing, and aquatic and shery in the regions along the CPEC, with the
highlight on technical exchange and cooperation in the elds of development of
comprehensive agricultural production capacity, construction of farmland water
conservancy facility and agricultural products circulation facility.,.

- Improve post-harvest handling, storage and transportation of agricultural


products, and innovate in marketing and sales models.

- Improve water resources operation and management, strengthen development of


pastoral areas and desert, and promote application of remote sensing technology.

18
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

- Strengthen production of agriculture inputs particularly pesticides, fertilizer,


machinery and support services including agriculture education and research.

Collaborate in forestry, horticulture, sheries and livestock medicines and vaccines.

- Strengthen production of horticulture products.

V. Tourism

China and Pakistan should further exploit the potential advantages of the tourism
resources in the regions along the CPEC, especially the China-Pakistan border areas. They
should actively research comprehensive development of coastal tourism within the CPEC
coverage, with Gwadar and Karachi as the hubs, expand cross-border tourism and improve
the quality of tourism services to effectively promote the socio-economic development of
the two countries.

- Actively consider the potential advantages of the tourism resources in the regions
along the China-Pakistan Economic Corridor, especially the China-Pakistan border areas
along the railways and highways; jointly research the development and construction of
cross-border tourist routes.

- Actively discuss the feasibility of constructing the “2+1+5” tourism spatial structure
in Pakistan, which includes two centers, one axis and ve zones: Karachi Port and Gwadar
Port as the two centers, and the coastal tourism belt as the development axis, and ve
tourist zones of Jiwani & Gwadar tourism zone, Jhal Jhao, Ormara, Sonmini and Keti
Bander.

- Improve the tourism public service system in cross border areas, with particular
attention to the services of public information, convenient transportation, security
protection and other services beneting the public.

- Actively consider to building a tour route connecting coastal cities of Pakistan and
themed on coastal leisure & vacationing, and the initial suggested route is: Keti Bander -
Karachi - Sonmiani - Ormara - Jhal Jhao - Gwadar - Jiwani.

VI. Cooperation in Areas concerning People's Livelihood and


Non-governmental Exchanges

19
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

China and Pakistan should further strengthen cooperation between local


governments, strengthen the communications among non-governmental organizations,
develop extensive project cooperation centered on public opinions communication,
people-to-people friendship and people's livelihood improvement, and enhance the
comprehensive service capability of the cities along the CPEC. They should signicantly
improve people's livelihood to provide a good social environment for the CPEC building.

- Apply international and China's new urbanization concepts to the municipal


construction of the node cities along the CPEC, such as the construction of the public
transport system and water supply and drainage systems; utilize China's strength in
technology, equipment, and capital, and solve some prominent livelihood issues via pilot
projects.

- Expand the scale of training programs in China for Pakistani central government
ofcials, parties and local government ofcials from regions along the CPEC; select
outstanding Pakistani students from regions along the CPEC and send them to Chinese
universities such as university in Xinjiang to receive higher education and make cultural
exchanges;

- Strengthen social and economic development cooperation within the CPEC


coverage; make efforts to carry out vocational training in Pakistan; - rely on higher
education resources in Pakistan to carry out design and R&D activities, strengthen
exchanges and cooperation among educational and research institutions in technology
transfer, strengthen the construction, operation and management of the transportation
and power infrastructure, and the technical training for Pakistani personnel by reference
to Xinjiang's “Academy of Central Asia Regional Economic Cooperation”.

- Provide medical assistance services in more places within the CPEC coverage and
upgrade existing medical facilities based on actual needs.

- Summarize experience and innovate models of public social welfare cooperation


mechanism in Gwadar areas between China and Pakistan, improve social welfare
cooperation in the CPEC coverage and enhance public support for CPEC.

- Cooperate to make top planning of water resources such as comprehensive planning


of water resources and river basin, improve the capability of Pakistan to coordinate the

20
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

planning of water resources development and utilization, conservation and protection,


ood and drought prevention and disaster relief.

VII. Financial Cooperation

The two countries should explore the establishment of multi-level cooperation


mechanisms and strengthen policy coordination. They should also strengthen their own
nancial reform and opening up, innovate in their own nancial products and nancial
services, and control nancial risks to create a good nancial environment for the CPEC
building. Following are the areas of focus:

- Strengthen cooperation in nancial regulation. The two countries should promote


monetary cooperation between the central banks, implement existing bilateral currency
swap arrangements, research to expand the amount of currency swap and explore to
enrich the use scope of bilateral currency swap; assign the foreign currency to domestic
banks through credit-based bids to support the nancing for projects along the CPEC;
promote the settlement in domestic currencies (RMB and Rupees) to reduce the demand
for third-party currency; strengthen the cooperation between the central banks and
nancial regulatory agencies of the two countries. The two sides will actively to use
bilateral currencies for the settlement of bilateral trade and investment under the
relevant arrangements. The two countries encourage clearing and settlement of the
nancial institutions from both sides through Cross-Border Inter-Bank Payment System
(CIPS), promote the free ow of capital in an orderly manner, and enhance the facilitation
in cross-border transfer of legitimate funds.

- Cooperation between nancial institutions. China supports Pakistan to cooperate


with the Asian Infrastructure Investment Bank (AIIB). Both countries shall promote the
mutual opening of their nancial sector and the establishment of nancial institutions in
each other; encourage nancial institutions of the two countries to support the nancing,
including the loans from international consortium of banks, for the projects along the
CPEC; establish and improve a cross-border credit system, and promote nancial services
such as export credit, project nancing, syndicated loan, trade nance, investment bank,
cross-border RMB business, nancial market, assets management, e-bank, and nancial
lease; support the project nancing by RMB loans, and establish the evaluation model of
power bill in RMB.

21
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

KEY COOPERATION AREAS

- Cooperation between nancial markets. The two countries shall promote the
opening and development of the securities markets, support the multi-currency direct
nancing of Pakistan's central and local governments, enterprises and nancial institutions
in China, strengthen the cooperation between stock exchanges of the two countries, and
support the two countries' enterprises and nancial institutions in carrying out direct
nancing for projects along the CPEC in each other's capital markets.

- Financial cooperation between Free Trade Zones (FTZs). Pakistan shall promote the
construction of Gwadar Port Free Zone by drawing on the experience of China (Shanghai)
Pilot Free Trade Zone and other Pilot Free Trade Zones in China, and explore RMB offshore
nancial business in Gwadar Free Zone. Both countries shall strengthen nancial
cooperation between their Free Trade Zones and explore the formation of a RMB backow
mechanism.

22
w w w. c p e c . g o v. p k
Chapter V
Investment and Financing
Mechanism and Supporting Measures
Long Term Plan for China-Pakistan Economic Corridor

INVESTMENT AND FINANCING MECHANISM AND SUPPORTING MEASURES

I. Investment and Financing Mechanism

China should give full play to its advantages in investment and nancing in
accordance with the principle of joint investment, joint construction and sharing benets.
The two countries should reasonably determine the investment and nancing modes based
on the nature of projects and the status of cash ow. They should create necessary
commercial conditions for the enterprises to carry out the projects according to the
market-oriented principle, and establish a reasonable cost and revenue sharing
mechanism to ensure reasonable commercial returns from the projects for all
stakeholders.

- Government funds. The governments of the two countries bear the primary
responsibility for investment and nancing of public welfare projects. Relevant policies
and procedures shall be honored to coordinate the use of grant, interest-free loans,
concessional loans and preferential export buyer's credit provided by China to support
strategic priority projects along the CPEC, further enhance the preferential margins and
ensure the funds are used exclusively in the projects along the CPEC. The Pakistani federal
government and provincial governments along the CPEC should try to assume some
investment and nancing responsibilities by various means, such as earmarked budget
funds at all levels for the CPEC building and allowing provincial governments to issue
nancial bonds in domestic and foreign capital markets. Both governments actively take
various forms to provide credit enhancement support for major nancing projects,
effectively reduce the nancing costs and protect the rights and interests of creditors.

- Indirect financing of financial institutions. Both countries shall strengthen


strategic cooperation between policy banks, development nance institutions and
commercial banks, and study and solve nancial issues with the CPEC building; explore
various ways to support the Silk Road Fund, China- Eurasia Economic Cooperation Fund in
participating in the investment and nancing for the CPEC.

- Direct investment of enterprises. Both countries shall encourage Chinese


enterprises, private sectors and private sector funds of other economic entities to make
various forms of direct investment, welcome Pakistan's private capital in participating in
the projects along the CPEC and establish various types of private nancial institutions
infrastructure funds.

- Loans from international financial institutions. Both countries welcome the


World Bank, the Asian Development Bank, the Asia Infrastructure Investment Bank (AIIB),
and other international nancial institutions to provide long-term concessional loans to
support the investment and nancing for the projects along the CPEC.
24
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

INVESTMENT AND FINANCING MECHANISM AND SUPPORTING MEASURES

- Other innovative investment and financing methods. Effective ways shall be


explored for Pakistan's federal and provincial governments, enterprises and nancial
institutions to conduct RMB nancing in Mainland China, Hong Kong and other offshore RMB
centers. Chinese and Pakistani market players are supported and encouraged to nance for
the projects along the CPEC in the international market and Pakistan

II. Institutional Association and Policy Support

- Make full use of the association of existing institutions. The role of existing
institutions and cooperation documents shall be given full play: China-Pakistan Economic
Corridor Joint Committee, China-Pakistan Joint Economic and Trade Committee, Bilateral
Investment Protection Agreement, Free Trade Agreement, Agreement on Service Trade in
Free Trade Zones, Agreement on Expanding and Deepening Bilateral Economic and Trade
Cooperation, and Framework Agreement on Energy Cooperation, as well as The Five-Year
Development Plan for China-Pakistan Economic and Trade Cooperation.

- Establish a closer inter-governmental linkage mechanism. Based on the Joint


Committee of the China-Pakistan Economic Corridor, the two countries will further deepen
bilateral cooperation, hold regular meetings and solve the problems through consultation;
strengthen the communication and cooperation between various departments of the
Committee, put forward work plans for specic cooperation projects and related matters,
and formulate detailed plans and cooperation agreements that will be implemented
jointly.

- Provide specific institutional support in different fields. In the eld of energy,


both countries shall negotiate to sign cooperation documents on oil & gas pipeline
networks, grid connectivity, power utilization and electricity price in due course; in the
eld of transportation, they shall determine as early as possible investment and nancing
plans, related charging standards and repayment agreements, and the Pakistani side will
formulate the charging standards for urban rail transit projects and laws and regulations
related to local nancial subsidies. They shall also establish a regional policy system
conducive to the construction and operation of Gwadar Port & Free Zone, and the Pakistani
side will introduce specic policies on the taxation, land, workforce employment, customs
clearance and cross-border use of RMB.

- Targeted technical training and cooperation. The training of Pakistani technical


staffs shall be strengthened for the construction and maintenance of major projects in the
elds of transportation, energy and industry and agriculture. Pakistan shall select and send
senior ofcers from governments at all levels, universities and enterprises to participate in
the construction and management of related projects and learn from China's experience.
25
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

INVESTMENT AND FINANCING MECHANISM AND SUPPORTING MEASURES

- Provide a higher level of security assurance. Pakistan deploys security personnel


from Army and other security forces to ensure the safety of projects' construction,
operation and maintenance, employees and camps under the CPEC. In the Gwadar region
a more rigorous safety precautions is built, especially in Gwadar Free Zone. Weapons are
prohibited from entering the Free Zone. The management of Khunjerab Port is
strengthened with 24-hour video surveillance along the section of China-Pakistan Highway
between the border to the port and regulatory forces shall be increased if the workload of
customs clearance requires so.

III. Other Support

- Establishment of a goal assessment mechanism. An assessment mechanism shall


be established to evaluate the implementation of major projects, assess the progress of
the long-term plan in every aspect every ve years, and then update and adapt the plan
accordingly.

- Establishment of a database. A suitable database containing the information of


major projects shall be established to dene relevant information indicators and monitor
the progress of projects in real time; continuously update the data in different stages of
the project cycle. The supporting geographic information system and cartographic
information database shall also be established. The long-term plan for the China–Pakistan
Economic Corridor has an ambitious goal and an arduous task. As long as the governments
and people of the two countries treat each other with all sincerity and cooperate sincerely,
they will build the CPEC into an open, inclusive one with economic prosperity, social
stability and security, and the wellbeing of people. The planning and implementation of
the CPEC will further improve the economic base of the all-weather strategic partnership
of cooperation between China and Pakistan, and deepen economic ties binding China and
Pakistan.

26
w w w. c p e c . g o v. p k
The Agreement On The Long Term Plan
for
China-Pakistan Economic Corridor
(2017-2030)
Long Term Plan for China-Pakistan Economic Corridor

The Agreement on
the Long Term Plan for Chian-Pakistan Economic Corridor (2017-2030)

between

National Development and Reform Commission of


the Government of the People’s Republic of China

and

Ministry of Planning, Development and Reform of


the Government of the Islamic Republic of Pakistan

In order to implement the consensus between the leaders of the two countries, the
National Development and Reform Commission of P.R. China and the Planning,
Development and Reform Ministry of Pakistan (hereinafter referred to be “party”
respectively and “parties” together), the two parties agree to sign the MOU to carry out
cooperation regarding the CPEC long-term Planning.

Now the two parties are actively implementing the construction of the CPEC.

Under the guidance of the JCC, and with the endeavor of both parties, both parties have
agreed the vision, goals, guidelines and principles of CPEC, Frthermore, both parties agree
to implement the cooperation in the key areas of connectivity, energy, trade and industrial
park, agricultural development and poverty alleviation, tourism, livelihood and ncial
sectors. The Long-Term Plan for CPEC (2017-2030) (hereafter referred to be “LTP” , as
attached) has been formed and approved by the Governments of the P.R. China and the
Islamic Republic of Pakistan.

The plan will provide the macro guidance for implementation of CPEC in the next phase,
and the plan would be adjusted based on the real situation as well as the consensus
between the two parties during its implementation in the future.

Furthermore, new routes/ nodes/ aspects may be considered for inclusion in future by
mutual agreement of both parties.

28
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

Both parties agree to sign this Agreement on Nov 21, 2017 in Islamabad. This Agreement is
copied in duplicate, each of which is written in Chinese and English, and both versions have
the same meaning and will have the equal effect.

National Development and Reform Ministry of Planning, Development and


Commission of the Government of the Reform of the Government of the
People’s Republic of China Islamic Republic of Pakistan

29
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

Signing Ceremony Long Term Plan for China-Pakistan Economic Corridor

Federal Minister for interior, Planning, Development & Reform Prof. Ahsan Iqbal and Mr. Wang
Xiaotao, Vice Chairman NDRC Signing Memorandum of Understanding for Long Term Planning In
Islamabad On November 21, 2017.

30
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

Some Historic Pictures of CPEC


7th JCC Meeting of CPEC in Islamabad, Pakistan on 21st November 2017

31
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

Some Historic Pictures of CPEC

6th JCC Meeting of CPEC in Beijing, China on 29th December 2016

5th JCC meeting of CPEC in Karachi, Pakistan on 12th November, 2015

4th JCC meeting of CPEC in Beijing, China on 25th March 2015

32
w w w. c p e c . g o v. p k
Long Term Plan for China-Pakistan Economic Corridor

Some Historic Pictures of CPEC

3rd JCC meeting of CPEC in Beijing, China on 27th August 2014

2nd JCC meeting of CPEC in Beijing, China on 19th February, 2014

1st JCC meeting of CPEC in Islamabad, Pakistan on 27th August 2013

33
w w w. c p e c . g o v. p k
Ministry of Planning
Development & Reform
Government of Pakistan

CPEC
CHINA-PAKISTAN ECONOMIC CORRIDOR

w w w. c p e c . g o v. p k